Do you have a forgotten 401K? Money sitting in an account you completely forgot you had. Yearly reviews found individuals abandon about 2.8 million in 401 k accounts from past employers. Capitalize, a company that helps Americans roll over their 401k believes that the current total in abandoned accounts has reached $1.35 trillion.
Employees are no longer loyal to the company that hired them. Most Americans hold several jobs over their life span. A survey collected by the U.S. Bureau of Labor show that individuals from 1957 to 1964 worked an average of 12.4 jobs. That number is increasing dramatically. Today’s headlines talk about the “Great Resignation,” where many people are resigning, seeking better employment, or even starting a corporation.
Doing nothing can be costly
If you think you might have left money behind, it is worth the effort to track it down. The typical amount in neglected accounts is $55,400. The longer they remain inactive, the more difficult it will be to recover these resources.
Overlooking old 401ks and how much cash is in them is highly typical. You’ve worked for this cash, so it’s vital to find it. Start by finding your old records or documentation from past employers. If the company is permanently closed, your funds may not go, but they become more challenging to find.
You should update all accounts when you move so that you will receive notifications if another company is now managing your employer-sponsored 401K.
1. Make a List of Past Employers
Start by writing down who you previously worked for, then see if they are still in business. If the company is still active, call the human resource department to see if you have any remaining benefits. If you confirm that you have a 401k or some other type of benefit, update all your contact information. Additionally, take note of the corporations where a 401k and stock benefits still exist. Remember contacting them is the best way to know where you stand.
2. If an organization has shut down, try your local, state, and country websites.
Organization closings, consolidations, or 401(k) servicer changes can make an old record harder to follow. If the corporation is out of business, you might want to reach out to the Department of Financial Services in the state where you were employed. In Florida, the Department of Financial Services runs a website called FLTREASUREHUNT.GOV; you will find unclaimed rebates, paycheck, tax refunds, and more. Some states have laws to protect your 401K. from employers who go out of business. Another resource to check would be the U.S. Department of Labor.
You can also look for your cash, which might be viewed as unclaimed property, by visiting unclaimed.org and missingmoney.com. Both have connections to state financiers, representatives, or different authorities who routinely update their arrangements of unclaimed resources.
3. Rollover the cash into a current 401, Ira, or Roth Account
Once you receive a check, you have 60 days to deposit it into a 401 or an Ira. Failure to deposit the money can result in penalties. If you elect to make a Roth retirement account, you will have to pay taxes on the amount.
4. Don’t forget to review your account
Take a moment and ensure the money has been properly rolled over. It is also an excellent time to review retirement strategies and make necessary changes.
5. Don’t wait; consolidate as you go.
Merging your accounts can be beneficial to keep things straightforward and capitalize on your retirement reserve funds. One password to remember, one location to visit, and one representative to call can save time down the road.